For banks, their employees need to learn more about insurance products, which requires a higher workload and training. In the case of several bancassurance agreements, bank advisors may have incentives for conflict. You can recommend one product through another for personal interest. It is also difficult to determine who should assume legal responsibility in the event of a dispute with clients. In bancassurance, insurance companies do not have direct control over the sale of their products. It may be more difficult to manage marketing strategiesMarketing StrategyA marketing strategy refers to a long-term plan formulated by a company to achieve certain organizational goals. The plan describes how business. For example, it can be difficult for insurance companies to reach out to the right customers. Previously, bancassurance distribution agreements between banks and life insurers were governed by common circular 86. Following the issuance of the new rules on insurers` insurance activities under Circular 50 and Decree 73, Circular 37 was issued to replace Common Circular 86 and to clarify banks` rights and obligations with respect to bancassurance agreements. Digital technology invites both banks and insurance companies to refine their bancassurance agreement. They need to respond together to change and change the way they serve their customers. Bancassurance refers to an agreement between a bank and an insurance company.
In bancassurance, the insurance company can use the bank`s distribution channels to sell products. In return, the banks receive a certain fee from the insurance company. Insurers and banks can audit existing and new bancassurance agreements to assess the impact and compliance issues of Circular 37. In addition, Circular 37 provides that bancassurance agreements (i) write the provision and verification of customer information and related information; and (ii) insurance premium collection and payment agreements between the bank and the insurer. These factors contribute to the growth of bancassurance worldwide. Factors holding back the global bancassurance market are the reputational risks of banks and the strict rules and regulations applied in some regions. The 10-year contract is seen as particularly beneficial to both parties. Piraeus Bank is a renowned co-operator of international prestige, ensuring the provision of credible insurance products to its customers. Ergo International, through its subsidiary Victoria General Insurance Company S.A. in Greece, provides cooperation with a leading financial group in Greece that offers one of the largest and most efficient branch networks in the country. In accordance with bancassurance rules, a bank can only market the products of three life, general and health funds. Banks that merged with them were also banned from entering.
Circular 37 will come into force on 2 March 2020 without clarifying the transitional mechanisms or the effects on bancassurance agreements implemented before it came into force. The State Bank of Vietnam (SBV) recently issued Circular 37, which contains guidelines for bancassurance operations, in particular insurance agencies of foreign credit institutions and bank branches (“banks”) for insurance companies (“insurers”). With regard to bancassurance agreements, Vietnamese law treats banks as agents of the insurer and bancassurance distribution agreements as insurance agreements. Given the broader scope of Circular 37 with respect to the general (non-life) insurance area, the banks concerned and non-life insurers may also want to review existing bancassurance agreements.